SECTION A
QUESTION 1
a) Identify and evaluate all of the financial elements a contracting Quantity Surveyor has to continually monitor throughout the duration of a project.
(7 marks)
b) At each interim valuation stage it is possible that the assessment of certain elements is inflated. What term describes such an event and why is it important to recognise when it has occurred?
(5 marks)
c) Profit can be described as ‘the financial reward for the effective management of a contract’. Critically appraise all of the processes undertaken by contracting Quantity Surveyors in order for them to monitor profit throughout a project.
(21 marks)
TOTAL MARKS FOR QUESTION 1 – 33 MARKS
QUESTION 2
a) What are the fundamental differences between the cost-category headings used to describe, for example, a contractor’s personnel based on-site and those employed within a head-office?
(6 marks)
b) Evaluate the various ways in which an Estimator is able to include the categories described above within a tender submission.
(8 marks)
c) Critically appraise the processes used by a contractor to financially assess both of these categories each month.
(19 marks)
TOTAL MARKS FOR QUESTION 2 – 33 MARKS
QUESTION 3
The RICS describes the NRM as guidance for those involved in the cost management of construction projects and further provides the NRM1 for use in the production of cost estimates.
Briefly explain the use of Cost Plans and with reference to a project plan of work describe three alternative methods of estimation used to value the constructional elements of a Cost Plan. Provide appropriate examples to illustrate your answers.
TOTAL MARKS FOR QUESTION 3 – 33 MARKS
SECTION B
QUESTION 4
Your company, a main contractor, has been successful with a project tender bid. You have been provided with a copy of the contractual bill of quantity’s original ‘Disposal System’ section (bill ref 2/7 – copy provided overleaf). The estimator has informed you that the bill rates include profit and overheads at percentages of 20% & 20% respectively, and that the initial rate build-ups used ratios of 40%, 20%, 40% & 0% in regard to the constituent elements of Labour, Plant, Materials and Subcontractors. It was originally envisaged that all works would be undertaken by your company’s own operatives (ie direct labour gangs).
a) Determine, showing your full calculation, the total individual amounts of ‘profit’ and ‘overheads’ as included within this section of the original tender.
(4 marks)
b) Using the original BOQ sheet as provided convert it into an ‘Internal’ bill page and, on completion, provide a brief summary regarding the total amount of each of the derived constituent parts. (NB: Submit this sheet with your answer book)
(15 marks)
c) Due to unavoidable circumstances, and to avoid delaying site progress, all of the rainwater pipe and guttering works (bill ref 2/7 items A,B,C,D) are now to be carried out by the late inclusion of a subcontractor who has quoted the sum of £35,000. From the main contractor’s perspective, show, with full details of your calculations, the financial affect this will this have on the project.
(8 marks)
d) In an attempt to negate the effect of the problem encountered within ‘c’ above, you are in negotiation with a builder’s merchant for the supply-only of all materials as required to complete bill items 2/7 E,F & G. What percentage reduction on your net material costs must be agreed to return the project to a state of nil profit, i.e. the break-even point?
(6 marks)
TOTAL MARKS FOR QUESTION 4 – 33 MARKS
QUESTION 5
a) Following a successful Tender a contractor often has to submit a fully priced bill of quantities to the client. Why is it that rates contained within this ‘contractual’ document sometimes differ from the estimator’s originally prepared element values? Within your answer provide three suitable examples to explain what may have occurred.
(7 marks)
b) From the contractor’s perspective what possible benefits and drawbacks could be faced if the situation described above were to occur?
(9 marks)
c) Why must the contracting Quantity Surveyor be aware of any differences between the estimator’s figures and those as shown within contractual documentation?
(3 marks)
d) The Tender Summary shown below has been taken from a bill of quantities as submitted to a client. Using both the following information and the blank table-template as provided overleaf, ‘rebuild’ the estimator’s original ‘true’ tender.
Original Overhead & Profit additions were 20% & 10% respectively
All Overhead sums have been included within tendered Preliminaries
All Profit sums except for those related to the Measured Works section have also been included within the Preliminaries
Within your answer provide details of any assumptions you may have made.
(14 marks)
Solution
SECTION A
Question One
- a) Identify and evaluate all of the financial elements a contracting Quantity Surveyor has to monitor throughout the duration of a project continually.
The contracting quantity surveyor has to continually keep in check different cost factors that are incurred in the complete execution of the project.
Firstly, the contractor has to assess the cost of raw materials; market prices of inputs keep on fluctuating due to different economic and market conditions. It is for the quantity surveyor to ensure that actual expenses incurred are as close as possible to the amount estimated in the Bill of Quantity document.
Secondly, there is the financial element of logistics into, out of and within site. The quantity surveyor has the responsibility of controlling the kind of logistical methods used in relation to the cost that the client is willing and able to incur……………………………………..To access the rest of the solution for $10, please click on the purchase button
